Customer and Supplier Contra Entries

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When a company deals with an entity who is both a debtor and creditor they may choose to only pay the
balance of the accounts.

Payment will be made by the party who owes the most money rather than both parties making complete


For example below ABC Pte Ltd is a debtor (300A/011) and also a creditor (400A/006).
There is a sales invoice amount of 500 and a purchase invoice of 300.
There is a need to collect the balance of 200 which the company ABC Pte Ltd owed after contra off both

When company ABC Pte Ltd make payment on the balance of 200, below is the example of the entries that you need to enter using Transaction File Maintenance.

After that proceed to knock off both customer and supplier invoice with the entry you entered above.

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